Limiting intellectual property : the competition interface

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Abstract

This is a study of legal limits of the exercise of intellectual property, with emphasis on chip
designs. In Part One, the focus is on the economics of innovation dynamics and the nature of
the social bargain underlying intellectual property. It analyses the function of intellectual
property and the structure of protection of chip designs under the US chip law, the IPIC
Treaty and the Agreement on TRIPS. It suggests that while protection of intellectual property
is designed to promote technical innovation and enhance competition in the public favour, the
innovation process is carried out in conditions of increasingly imperfect competition. On these
grounds, a point is made to limit the exercise of proprietary rights in the welfare/efficiency
perspective.
Part Two addresses the treatment of legal limitations. An analysis is made concerning the
evolution of the safeguarding provisions on which unauthorised use of copyright and patent in
the British legal system relies. These safeguards, structured within the intellectual property
law, have gradually been developed to also rely on a resurgent competition legislation, which
has been considerably used by OECD countries to order the exercise of proprietary rights.
The ability of modem competition law to induce an intellectual property order, and the
features of the adjudicatory process of non-voluntary licences over UK patents are also
examined. From the findings the emergence of; namely, a safeguarding policy is identified.
The conceptualisation of this institutional policy, aiming at efficiency and welfare objectives
related to the exercise of proprietary rights, is a central theme. It shows that safeguarding
provisions intrinsic to intellectual property law is insufficient to pursue these objectives, and
holds that to protect intellectual property without an effective control of anti-competitive
practices is a distorting and unsustainable legal policy.